The sterling lowered to $1.2557 on Thursday. Traders are waiting for a Bank of England meeting, which is scheduled this week. They expect policymakers to expand quantitative easing due to a struggling economy and rocky trade negotiations with the European Union. The British pound was little changed at 89.65 pence against the euro.
The Bank of England may add 100 billion pounds to its quantitative easing program. Some experts think that an even larger increase may occur amid concerns about the economic outlook.
On the other hand, the Japanese yen and the U.S. dollar gained on Thursday. Demand for safe-havens surged as new coronavirus cases multiplied. The yen edged up to 106.86 against the dollar. The Japanese currency also jumped against the Aussie and the kiwi, reinforcing heightened risk aversion.
The dollar traded at $1.1256 per euro after gaining 0.2% in the previous session. And it also bought at 0.9493 against the Swiss franc, holding onto a 0.3% gain on Wednesday.
The upside for U.S. futures and other risk assets has dwindled as more people are talking about the second wave of coronavirus infections – noted Junichi Ishikawa, the senior foreign-exchange strategist at IG Securities in Tokyo.
Worries about new outbreaks support the greenback and the yen because they are both safe havens. On the other hand, the pound has some problems. The British economy is not in good shape right now, and Brexit remains a risk as well.
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What about Asian currencies?
The Australian dollar traded to a low of $0.6838, extending a downfall from a one-year high reached last week. The currency tumbled down after data showed the economy shed twice as many jobs as expected in May. The New Zealand dollar also declined to $0.6447.
Meanwhile, the Chinese Yuan edged up slightly to 7.0735 per dollar in onshore trading. China’s top policymakers promised to keep cash abundant in financial markets, and further support growth.
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